(image) A new study by the Diffusion Group predicts that every major broadcaster and their mother will be offering their own streaming service by 2022. If you've watched CBS, FX, AMC, Showtime, HBO, and every other channel under the sun already launch their own direct to consumer offering, that's not a particularly difficult or brave prediction to make. Especially given that Disney expects to launch its own streaming service next year, stocking it filled with exclusive access to Star Wars, Pixar, Marvel, and other popular content.

The question becomes whether this fracturing creates its own, new problems -- like exclusivity silos that force customers to hunt and peck between numerous services to find the shows and movies they want.

"Big media companies are reacting more boldly to changes in TV viewing behavior, Mike Berkley, TDG s senior advisor said in a press release. "Consolidating, bulking up on originals, and marketing directly to consumers are driving their strategic direction."

According to Diffusion, this shift could cause increased tension between broadcasters and cable operators who are already constantly engaging in harmful retrans feuds. Feuds that tend to result in customers losing access to content they're paying for (without any refunds) every time the two sides can't agree on a new programming contract.

"The legacy model is built upon decades of comfortable relationships between networks and operators," notes the group. "If networks extract too much high-value content too quickly, channel conflicts are inevitable."

That could get particularly interesting in the wake of the death of net neutrality rules. Blocking, throttling, or otherwise hamstringing broadcaster services could prove popular at major ISPs. Similarly, ISPs that own their own broadcasters (Comcast) could block consumer access to competing content (something history has shown to be a double-edged sword, especially during retrans or carriage fee feuds).

Siloing off exclusives within an ocean of independent streaming service also comes with its own challenges, Diffusion states.

On the plus side, this rise in direct to consumer offerings should force companies to compete, lowering prices for consumers. On the flip side, if every broadcaster exclusively offers its own content only through its own streaming video service, that could result in users returning to piracy if forced to pay for a dozen individual services just to get a semi-uniform content offering.

(image) Most of the major US broadband ISPs have unsurprisingly rushed to the defense of the FCC's extremely unpopular repeal of net neutrality protections. All of the major, ISP-funded lobbying organizations (NCTA, CTIA, and USTelecom) last week filed motions to intervene on the FCC's behalf during the looming lawsuits over the repeal. The FCC has been sued by 23 States attorney generals, small companies like Vimeo and Mozilla, and most consumer advocates for ignoring the public and the people who built the internet just to make it easier for natural monopolies like Verizon, Charter, AT&T and Comcast to behave anti-competitively. read comment(s)

When AT&T, Verizon and Comcast lobbied the Trump FCC to ignore the public and kill net neutrality last fall, they also convinced the FCC to include language banning states from protecting consumers in the wake of FCC apathy on privacy and net neutrality. And, as these ISPs expected, more than half the states in the country have now introduced some form of net neutrality rules in a direct challenge to the FCC and its newfound BFFs at major broadband duopolies, either in the form of legislation or executive orders preventing states from doing business with anti-competitive ISPs. But as it turns out, neither FCC boss Ajit Pai or the ISPs he's pandering to were as clever as they thought they were. Legal experts and many state lawyers have been pointing out that when the FCC ruled to roll back its classification of ISPs as common carriers under Title II of the Telecom Act (which gave the FCC the authority it needed to enforce the rules), it also obliterated its authority to dictate or hamstring state-level protections. More simply, when the FCC neutered its authority over ISPs, it also neutered its authority to prevent states from filling the consumer protection vacuum. Authority it's still somehow trying to claim it has. "The FCC doesn't have preemption authority just because it says so," Washington State Rep. Drew Hansen told Ars Technica this week while discussing that state's efforts to impose new net neutrality rules. "Here is the oddity of the position that they're taking in the net neutrality repeal," Hansen said. "They're saying the Communications Act lacks any authority that would give them the ability to impose broad standards of conduct on the Internet, but grants them broad sweeping authority to preempt state consumer protection laws related to the same area. It's not clear to me how this can be the case." Hansen wasn't the only one making that point this week. Net neutrality, telecom expert and Stanford Law professor Barbara van Schewick (whose treatise on how net neutrality is the default and prefferred state of the internet since construction is essential reading) made a similar comment in a statement provided to DSLReports.com. Schewick stated that if done correctly (like this week's new California proposal), state efforts to protect net neutrality should survive legal challenge by ISPs and the FCC thanks to the FCC's rushed repeal and self-neutering. "While the FCC s 2017 Order explicitly bans states from adopting their own net neutrality laws, that preemption is invalid," van Schewick noted. "According to case law, an agency that does not have the power to regulate does not have the power to preempt. That means the FCC can only prevent the states from adopting net neutrality protections if the FCC has authority to adopt net neutrality protections itself." But, she notes, the FCC obliterated that authority with its misleadingly-named "Restoring Internet Freedom" repeal. "By re-classifying ISPs as information services under Title I of the Communications Act and re-interpreting Section 706 of the Telecommunications Act as a mission statement rather than an independent grant of authority, the FCC has deliberately removed all of its sources of authority that would allow it to adopt net neutrality protections," she notes. "The FCC s Order is explicit on this point." That's a fairly impressive self-own by Ajit Pai and friends, who were so blinded by their desire to violate state consumer protection rights for natural monopolies like Comcast, they didn't bother to understand the law they were relying on. That's a fairly impressive self-own by Ajit Pai and friends, who were so blinded by their desire to violate state consumer protection rights for natural monopolies like Comcast, they didn't bother to understand the law they were relying on. Of course the FCC's battle with the states is just one small part of the looming legal challenges the agency faces. The FCC is also being sued by 23 State Attorneys General, numer[...]

We've already discussed how the FCC's recently released broadband availability map is comically error prone, not only hallucinating competitors, but the speeds they're actually able to deliver. The map, which the FCC recently dusted off and re-launched without really fixing its core problems, also omits pricing data entirely. The accuracy and lack of price data stems from one core reason: ISPs fight tooth and nail to try and downplay coverage gaps and the overall lack of competition in the US broadband market, lest somebody try to actually do something about it. And as it turns out, the map the FCC uses to determine which areas get subsidies for wireless deployment isn't much better. A coalition of Senators recently wrote to the FCC (hat tip to our friends at Stop the Cap) pointing out that the agency's Mobility Fund Phase II broadband map is failing at its core mission: helping government determine which areas should get already earmarked subsidies ($4.53 billion over the next 10 years) to shore up mobile coverage gaps in under-served areas. We understand that the map was developed based on a preliminary assessment from a one-time data collection effort that will be verified through a challenge process," the senators wrote. "However, we are concerned that the map misrepresents the existence of 4G LTE services in many areas," they added. "As a result, the Commission s proposed challenge process may not be robust enough to adequately address the shortcomings in the Commission s assessment of geographic areas in need of support for this proceeding," they noted. The coalition of bipartisan Senators from states like Kansas, New Hampshire and Mississippi amazed to see the FCC map claim that nearly 100% of their states could already get wireless broadband service, a far cry from reality, noticed by anybody who has lived or driven through those states with their smartphone. Some lawmakers have been forced to dedicate portions of their websites to asking for consumer coverage feedback in the quest to get a more accurate picture of coverage gaps than the FCC is willing to provide. "For too long, millions of rural Americans have been living without consistent and reliable mobile broadband service," the Senators said in their letter to the FCC. "Identifying rural areas as not eligible for support will exacerbate the digital divide, denying fundamental economic opportunities to these rural communities." Of course you'll recall that FCC boss Ajit Pai has repeatedly and breathlessly proclaimed to be dedicated to closing the digital divide, despite the fact that the lion's share of his agenda at Trump's FCC (like killing net neutrality) tends to make broadband availability and pricing problems worse. As a former Verizon lawyer, it's no secret that Pai's real agenda is primarily focused on protecting incumbent ISP revenues from the horrors of real competition. Again, if the data shows that the broadband market is uncompetitive and rife with coverage gaps, somebody might just want to do something about the broken status quo, and entrenched industry giants (and their newfound BFFs at the FCC) certainly don't want that. read comment(s)[...]

(image) While many of our regulars have realized the benefits of an over the air antenna for years, it's a phenomenon that more recently has caught on among Millennials and younger broadband subscribers looking to avoid over-priced and bloated cable TV bundles. And according to a new study by Parks Associates, one in five US broadband households now use an antenna as their primary mode of consuming television. That's up from 16% back in 2015, and the phenomenon shows no indication of slowing down.

Again, the firm's latest study found that soaring prices is the predominant reason for users that cut the cord, whether they switch to antennas or streaming alternatives like Netflix, YouTube, Hulu, or Amazon.

According to the firm's study, 50% of the households that have switched, shaved, or cut the cord say that traditional pay TV service is "not worth the cost."

"Increasingly, consumers are cobbling together their own bundles of content sources. Digital antennas are experiencing a resurgence as consumers consider over-the-air TV and OTT video services as alternatives to pay TV," Parks said of its latest study.

"The percentage of 'Never' households (households that have never subscribed to pay-TV services) has held steady, and the percentage of households actually cutting the cord has increased between 2015 and 2017," notes the firm. "Antennas are an affordable source for local channels to these households."

Some other interesting findings from the report:

• 63% of subscribers who cannot currently restart programs from the beginning find that feature to be appealing • 17% of consumers who cancel their pay-TV service would have stayed with their provider if there were no monthly fees for their set-top boxes • Average fees for standalone broadband have increased nearly 25% since 2010 • 20% of Wi-Fi households experience problems with coverage in their home

(image) Users in our Cablevision forum note that the company has been issuing 24 hour suspensions for customers that repeatedly download copyrighted material. Users also discuss your options when your ISP accuses you of copyright infringement you didn't actually commit.

While the telecom sector are thrilled that the Trump administration has killed popular consumer protections like net neutrality, they're not quite as thrilled about a trade war with China. Reuters notes that the Trump administration is considering tariffs on up to $60 billion of Chinese imports, predominately focused on Chinese telecom goods. The goal, as it has been with the pressure on AT&T and Verizon to stop doing business with Huawei, is to protect U.S. companies from Chinese competition and China's tendency to skirt over and around international trade agreements. But many of these same companies rely on Chinese hardware (or parts of hardware) for their own deployments, and are wary of the higher consumer and business costs resulting from a new trade war. "It s unclear exactly how the possible action--which appears to still be in the planning stages and might not happen--could affect U.S. telecom companies," notes Fierce Wireless in response to the report. "However, if Trump does impose tariffs on telecom equipment from China, the action likely would raise the price of that telecom equipment for U.S. companies. Further, the action could spark a response from China--the world s largest wireless market." Both AT&T and Verizon earlier this year were pressured to scrap smartphone deals with Huawei due to vague "national security concerns." But an 18 month government investigation found no evidence that Huawei had spied on American citizens. What evidence that does exist tends to suggest that U.S. telecom companies like Intel and Cisco enjoy hyping the potential Chinese spying threat in order to prevent additional competition in the US networking gear and smartphone market, often disguising this protectionism under the umbrella of national security concerns. And while China certainly does spy and engage in bad behavior (like most major powers), the breathless hysteria surrounding companies like Huawei tends to ignore the fact that Snowden documents revealed the United States was caught hacking into Huawei in a quest to install back doors in their products, and was also caught covertly intercepting Cisco shipments to install backdoors as well. This "do what we say, not as we do" approach hasn't fared particularly well so far, and many trade experts don't believe additional tariffs are likely to help matters if the end result is a trade war that drives up costs for everybody in the telecom supply chain (all costs that will be passed on to you, the consumer).read comment(s)[...]

(image) In a truly competitive market, the cable TV industry would respond to streaming competition by shoring up their horrible customer service and lowering prices. Instead, many cable and broadcasting executives continue to double down on the relentless price hikes that are driving cord cutting in the first place. Consumer Reports this week offered a breakdown of what the year has looked like so far in terms of cable TV price increases, and as most of your wallets are already well aware, it's not a particularly pretty picture.

Nearly every major cable operator has dramatically raised TV prices this year.

Not surprisingly, cable operators from Dish to Comcast place the entirety of the blame on the shoulders of broadcasters, who continue to demand massive price increases to carry the same content.

"The costs we are charged to carry popular networks continue to increase significantly, and we must pass along a portion of these higher costs to our customers," Comcast says of a massive array of price increases imposed back in January. "As a result, on average, nationally, the customer bill will increase by 2.2 percent in 2018.

And while broadcast rates are a major driver of higher pay TV pricing, cable operators aren't innocent little daisies when it comes to these soaring costs. Many take every and any opportunity to also jack up the price of DVR rentals, fees to pay your bill in person, fees to pay your bill over the phone, and more. It's also worth remembering that Comcast is a broadcaster thanks to its 2011 purchase of NBC Universal and its regional sports networks.

When these mindless rate hikes slow down is anybody's guess. Most cable and broadcast executives are too afraid of accelerating the cord cutting shift by offering cheaper and more flexible product, which in and of itself only works to -- accelerate the cord cutting shift. As Sling TV and AT&T appear to have figured out, the reality is that TV simply isn't going to be as profitable as it used to be in the streaming era, and brands can either get out ahead of this evolution now, or try to play catch up later once millions more subscribers have left the pay TV stable for greener (read: less expensive) pastures.

That's not to say streaming will be a panacea. Broadcasters still own the rights to programming those services as well, as is evident by YouTube TV's decision to hike the price of its YouTube TV offering from $35 to $40 this week. Still, these alternatives remain less expensive and more flexible than traditional TV, and as the streaming market gets more and more competitive (and broadcasters continue to launch their own offerings) competition should help keep some of these increases in check. read comment(s)

(image) A new Tivo report indicates that once a user cuts the traditional TV cord, they're not particularly likely to re-subscribe to traditional cable service anytime soon. According to the 20th edition of the company's quarterly video trends report, users unsuprisingly continue to flee traditional TV services largely thanks to soaring prices, and the lower cost of migrating to streaming video services or the use of an over the air antenna. Once subscribers make the shift to these cheaper, more flexible options, they tend not to look back, Tivo says.

"Are consumers cutting the cord and choosing not to re-subscribe to cable because they re not missing it? TiVo will continue to track this trend for fluctuations in these two audiences, TiVo said in the report. "For pay-TV providers, subscriber retention remains crucial--as subscribers once lost may not return."

The study also unsurprisingly finds that most consumers of video would still prefer to be able to buy channels on an "a la carte" basis. You'll recall that this has been something that consumers have been clamoring for for the better part of the last twenty years, and despite politicians like John McCain briefly adopting the a la carte push as a pet issue, nothing much has come of it.

According to Tivo's survey of 3,300 consumers, 81.3% of consumers want a la carte, up 4.7 percentage points from a year ago.

"Every consumer would love to just pay $20 and then choose the twenty channels they want," Sling TV CEO Roger Lynch said in a blog post last year. "And we would love that too. We would do that in a heartbeat if programmers would let us but they won t. So we have fought long and hard to create consumer choice."

Broadcasters have long tried to argue that offering channels a la carte will raise rates and kill niche channels, though that's something that's happening anyway. Cable prices show no sign of slowing down, and many cable operators are now booting niche channels out of their lineup in an attempt to keep prices low. The lion's share of high cable prices can be attributed to sports programming many subscribers don't actually watch. When Verizon tried to offer tiers without ESPN (read: give consumers what they want), they were sued by ESPN for their effort.

According to Tivo's report, customers are willing to pay $35.87 for an a la carte package, and are willing to pay $1.50 per additional channel for an average of 24 channels. But broadcasting and cable execs, many of which clearly hope the traditional cable TV cash cow lives forever, refuse to offer such an option for fear of only accelerating the inevitable revenue decline inherent in such an evolution. What many of them haven't yet realized is they're not going to have much of a choice in the matter as cord cutting accelerates. read comment(s)